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 The Evolution of the Institution of the Military
 

October 31, 2007
The nexus of military and market is where the SysAdmin is logically found

OP-ED CHART: “Foreign Policy Privatized,” by Allison Stanger and Omnivore, New York Times, 5 October 2007, p. A27.
ARTICLE: “Blackwater Chief at Nexus Of Military and Business: From Scion to Navy Seals, Tied to G.O.P.,” by James Risen, New York Times, 8 October 2007, p. A6.

EXCLUSIVE: "The Man Behind Blackwater: Dutiful and intense, son of a self-made billionaire, Erik Prince is an adventure seeker and conservative true believer," by Evan Thomas and Mark Hosenball, Newsweek, 22 October 2007, p. 36.

Allison Stanger and I went to Harvard together, in both the Soviet program and the PhD program in Government. She’s now a Wellesley prof working on a book on the privatization of American foreign policy. Should be good, as this is a fascinating process we’re watching unfold.

Total federal spending on contractors has gone up from $219B in 2000 to $389B in 2005.
The bulk of that is with DoD (rising from $132B to $268B, but DHS is up to $10B in 2005 and State’s up to $5.5B, so no chump change there either.

Some geography (cumulative 2000-2005):
?$5B in North America
?just under $3B in South America
?$3B for all of Africa
?$30B in Europe
?$64B in Asia (with most to just two countries, one imagines).

We contract in all UN member states, save three. It began to take off under Clinton and continued to grow dramatically with Bush.

Smart bit by Stanger:

Some are tempted to turn back the clock and reassert traditional government authority, denouncing the private-sector greed and the “coalition of the billing.” But that would be a terrible mistake, for outsourcing is in part a rational response to the new possibilities of the information age. The challenge will be to manage creative forms of collaboration between government and the private sector in ways that serve the public interest.
No hyperbole there whatsoever, which is exceedingly rare on this subject.

Erik Prince won’t be the last private-sector visionary type to take advantage of this growing market niche. Blaming his success on political ties doesn’t cut it. He’s simply a smart and very aggressive contractor with a lot of ambition and a sense that history is now on his side.

And he’s right.

The second piece quotes Robert Young Pelton (author, Licensed to Kill) describing him as a conflicted Bruce Wayne/Batman figure, but I find that a bit much, having spent a day flying down with him and Steve DeAngelis in his personal plane to Blackwater’s HQ in Moyock NC and touring it with him (flying back to DC with him driving right into some scary storm clouds with a certain élan befitting his former SEAL status), and subsequently interacting with him in business meetings. He doesn’t strike me as conflicted whatsoever. He seems to know exactly who he is and what Blackwater can end up becoming.

So in my mind, it ain’t about demonizing Prince, but co-opting him and his entire industry into adequate levels of regulation.

What is adequate?

It will take more than one or two interventions to figure that out.
Posted by Dan's Blog at 3:40 PM - No Comments   Add a Comment  
 
 If I.T Merged With E.T by Tom Friedman
 

October 31, 2007
Op-Ed Columnist
If I.T. Merged With E.T.

By THOMAS L. FRIEDMAN
Ethakota, India

Well, here’s something you don’t see every day. I was visiting an Indian village 350 miles east of Hyderabad and got to watch a very elderly Indian man undergo an EKG in a remote clinic, while a heart specialist, hundreds of miles away in Bangalore, watched via satellite TV and dispensed a diagnosis. This kind of telemedicine is the I.T. revolution at its best. But what struck me most was that just underneath the TV screen, powering the whole endeavor, were 16 car batteries — the E.T., energy technology, revolution, at its worst.

Some 250 million Indians today have cellphones. Many of them are people who make just $2 or $3 a day. More and more are getting access to computers and the Internet, even in villages. But only 85 percent of Indian villages are electrified — and that is being generous, since many still don’t have reliable 24/7 quality power.

If only ... If only we could make a breakthrough in clean, distributed power — an E.T. revolution — it could drive the I.T. revolution into every forgotten corner of the world to create jobs, light up schools and tap the innovative prowess of rural populations, like India’s 700 million villagers. There is a green Edison growing up out here — if only we can give them the light to learn.

To appreciate that potential, look at how much is being done with just car batteries, backup diesel generators and India’s creaky rural electricity grid. I traveled to a cluster of villages with a team from the Byrraju Foundation — a truly impressive nonprofit set up by B. Ramalinga Raju and his family. Raju and his brother Rama are co-founders of one of India’s leading outsourcing companies, Satyam Computer Services. The Hyderabad-based brothers wanted to give back to their country, but they wanted it to be a hand up, not a hand out.

So besides funding health clinics and computer-filled primary schools in villages in their home state of Andhra Pradesh, they tried something new: outsourcing their outsourcing to villages.

Here in Ethakota, amid the banana and palm groves, 120 college-educated villagers, trained in computers and English by Satyam and connected to the world by wireless networks, are processing data for a British publisher and selling services for an Indian phone company. They run two eight-hour shifts, but could run three — if only the electricity didn’t go off for six hours a day!

Talking to the workers at the Ethakota data center — one of three Byrraju has set up — you can see what a merger of I.T. and E.T. could do: enable so many more Indians to live local and act global.

Suresh Varma, 30, one of the data managers, was working for a U.S. oil company in Hyderabad and actually decided to move back to the village where his parents came from. “I have a much higher quality of life here than in an urban area anywhere in India,” he said. “The city is concrete. You spend most of your time in traffic, just getting from one place to another. Here you walk to work. Here I am in touch with what is happening in the cities, but at the same time I don’t miss out on my professional aspirations. ... It is like moving from a Silicon Valley to a real valley.”

Unlike in the city, where outsourcing workers come and go, “in the village, nobody gives up these jobs,” said Verghese Jacob, who heads the Byrraju Foundation, which plans to gradually hand over ownership of the data centers to the villagers. “They are very innovative and positive, and because some of them had never worked on a computer before, their respect for the opportunity is so much more than for a city child who takes it for granted.”

When the world starts getting wired and electrified, you never know who you’ll bump into. In the village of Podagatlapalli, I met Sha Yu, a 22-year-old Chinese graduate of Beijing’s Renmin University and a Byrraju volunteer, teaching rural Indian high school students how to produce their own newspaper on a computer.

“I felt in China people don’t know so much about India, so I thought I want to come and see what is happening here,” she explained. “In rural India, communication is not that developed, so I started a newspaper for the high school. If I can learn something from here, and bring it back, I can give some ideas to the Chinese government. If this rural area can be empowered, it would be an amazing thing for the world.”

Amazing indeed. India’s strained megacities, like Mumbai and Calcutta, can’t keep growing. Mr. Jacob estimates that just one of his rural outsourcing centers creates the equivalent employment and salaries of 400 acres of farm land.

India, in other words, could actually mint more land in the countryside, but it can’t do it off car batteries. It will take a real energy revolution. If only ...

Posted by Dan's Blog at 2:27 AM - No Comments   Add a Comment  
 

 Iraq Dam Seen in Danger of Deadly Collapse
 

Iraqi Dam Seen In Danger of Deadly Collapse
By Amit R. Paley
Washington Post Foreign Service
Tuesday, October 30, 2007; A01

AT THE MOSUL DAM, Iraq -- The largest dam in Iraq is in serious danger of an imminent collapse that could unleash a trillion-gallon wave of water, possibly killing thousands of people and flooding two of the largest cities in the country, according to new assessments by the U.S. Army Corps of Engineers and other U.S. officials.

Even in a country gripped by daily bloodshed, the possibility of a catastrophic failure of the Mosul Dam has alarmed American officials, who have concluded that it could lead to as many as 500,000 civilian deaths by drowning Mosul under 65 feet of water and parts of Baghdad under 15 feet, said Abdulkhalik Thanoon Ayoub, the dam manager. "The Mosul dam is judged to have an unacceptable annual failure probability," in the dry wording of an Army Corps of Engineers draft report.

At the same time, a U.S. reconstruction project to help shore up the dam in northern Iraq has been marred by incompetence and mismanagement, according to Iraqi officials and a report by a U.S. oversight agency to be released Tuesday. The reconstruction project, worth at least $27 million, was not intended to be a permanent solution to the dam's deficiencies.

"In terms of internal erosion potential of the foundation, Mosul Dam is the most dangerous dam in the world," the Army Corps concluded in September 2006, according to the report to be released Tuesday. "If a small problem [at] Mosul Dam occurs, failure is likely."

The effort to prevent a failure of the dam has been complicated by behind-the-scenes wrangling between Iraqi and U.S. officials over the severity of the problem and how much money should be allocated to fix it. The Army Corps has recommended building a second dam downstream as a fail-safe measure, but Iraqi officials have rejected the proposal, arguing that it is unnecessary and too expensive.

The debate has taken place largely out of public view because both Iraqi and U.S. Embassy officials have refused to discuss the details of safety studies -- commissioned by the U.S. government for at least $6 million -- so as not to frighten Iraqi citizens. Portions of the draft report were read to The Washington Post by an Army Corps official who spoke on condition of anonymity because of the sensitivity of the matter. The Post also reviewed an Army Corps PowerPoint presentation on the dam.

"The Army Corps of Engineers determined that the dam presented unacceptable risks," U.S. Ambassador Ryan C. Crocker and Gen. David H. Petraeus, the U.S. commander in Iraq, wrote in a May 3 letter to Prime Minister Nouri al-Maliki. "Assuming a worst-case scenario, an instantaneous failure of Mosul Dam filled to its maximum operating level could result in a flood wave 20 meters deep at the City of Mosul, which would result in a significant loss of life and property."

Sitting in a picturesque valley 45 miles along the Tigris River north of Mosul, the earthen dam has one fundamental problem: It was built on top of gypsum, which dissolves when it comes into contact with water.

Almost immediately after the dam was completed in the early 1980s, engineers began injecting the dam with grout, a liquefied mixture of cement and other additives. More than 50,000 tons of material have been pumped into the dam since then in a continual effort to prevent the structure, which can hold up to 3 trillion gallons of water, from collapsing.

After the U.S.-led invasion of Iraq in 2003, American officials began to study risks posed by the dam, which they said were underestimated by Iraqis.

"Iraqi government believes dam is safe," concluded a 32-page PowerPoint presentation prepared by the Army Corps and dated December 2006.

On a tour of the dam on a recent blistering afternoon, Ayoub, the manager, contended that the dam was safe but acknowledged the unusual problems with it.

Seepage from the dam funnels into a gushing stream of water that engineers monitor to determine the severity of the leakage. Twenty-four clanging machines churn 24 hours a day to pump grout deep into the dam's base. And sinkholes form periodically as the gypsum dissolves beneath the structure.

"You cannot find any other dam in the world like this," said Ayoub, a mustachioed man in a dark business suit who has worked at the dam since 1983 and has managed it since 1989.

About two years ago, Ayoub became concerned that the pressure of the water was putting the dam at risk of failure. So he ordered that the dam's water level, which can reach 330 meters above sea level, not exceed 319 meters.

But reports prepared by the Army Corps of Engineers began to raise new alarms.

"Mosul Dam is 'unsafe' in any definition," the PowerPoint presentation said. It added: "Condition continually degrading" and "Failure mode is credible." Under a section labeled "Consequences of Failure," it says: "Mass civilian fatalities."

Ayoub said U.S. officials spoke in person about the dam in even more apocalyptic terms. "They went to the Ministry of Water Resources and told them that the dam could collapse any day," he said.

The report so alarmed the governor of Nineveh province, where the dam is located, that he asked that it be drained of all water immediately, Ayoub said.

Ayoub said he agrees that the most catastrophic collapse of the dam could kill 500,000 people, but he said U.S. officials have not convinced him that the structure is at high risk of collapse. "The Americans may very well be right about the danger," Ayoub said. "I think it is safe enough that my office is in the flood plain."

In an interview Monday night, Abdul Latif Rashid, Iraq's minister of water resources, said that he believed the safety situation was not critical and that he was more inclined to trust his engineers than American reports.

"Is the dam going to collapse tomorrow?" Rashid said. "I can't tell you that. Let us hope that we avoid a disaster and focus now on a solution."

The Army Corps has recommended that a partially constructed dam at Badush, which lies between Mosul Dam and the city, be finished as a stopgap measure in case Mosul Dam collapses.

But Salar Bakir Sami, director general of planning and development at the Water Resources Ministry, said Iraqi government officials do not think it is necessary to spend the estimated $10 billion for such a project. Instead, he said, the ministry planned to spend $300 million to construct a smaller version of the Badush dam that would generate electricity and provide irrigation, but not serve as a safety valve in case Mosul Dam breaks.

Rashid said his top priority is to fix Mosul Dam by building a concrete wall at its foundation that should shore up the design and provide "a permanent solution." He said experts have just discovered cutting-edge technology that would allow such a wall to be built, perhaps with construction starting by next year at a cost of less than $1 billion.

In the report to be released Tuesday, the Office of the Special Inspector General for Iraq Reconstruction, a federal oversight agency, found that little of the reconstruction effort led by the U.S. Embassy has succeeded in improving the dam. The office reviewed contracts worth $27 million, but an embassy official said the total cost of the project was $34 million.

The review found that a Turkish company, which was paid $635,000 for a contract awarded 19 months ago to build storage silos for cement, had done so little and such poor-quality work that its project may have to be restarted. One company contracted to design grout-mixing plants instead submitted plans for unusable concrete-mixing plants. High-tech equipment meant to help grouting is gathering dust because it won't work, according to investigators.

Embassy and Army Corps officials noted that it has been difficult to conduct oversight of the project because it is in a dangerous area. They said that contracts with the worst businesses have been terminated and that steps have been taken to ensure better management of the project in the future.

"Our focus is on whether the project that the Corps undertook got carried out and the answer to that question is no," said Stuart W. Bowen Jr., the special inspector general. "The expenditures of the money have yielded no benefit yet."

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 Western Feminists Mostly Silent on Radical Islam's treatment of Women
 

Western Feminists: At the Service of Radical Islam

Muslim Women Activists in North America: Speaking for Ourselves
Edited by Katherine Bullock. Austin: University of Texas Press, 2005. 215 pp. $22.95, paper.

A History of Women's Seclusion in the Middle East: The Veil in the Looking Glass
by Ann Chamberlin
New York, London, Oxford: Haworth Press, 2006. 298 pp. $39.95

Reviewed by Phyllis Chesler
Middle East Quarterly
Fall 2007
http://www.meforum.org/article/1769

One might expect Western feminists to take the lead in challenging Islamic gender apartheid, but sadly, this is not the case. Rather, they tend to be more concerned with Israel's "occupation" of Palestine or the U.S. "occupation" of Afghanistan and Iraq than with the Islamist persecution of women. They consider it "racist" to condemn gender apartheid of the most savage sort, and "racism" trumps concerns about gender.

Incredibly, those same Western feminists who condemn as patriarchal Western institutions of marriage, biological motherhood, heterosexuality, and religion now view Islamic veiling, the hijab (head scarf), purdah (seclusion of women), arranged marriage, and polygamy as sacred religious rights. Those same feminists who condemn Christianity and Judaism for more minor (but still serious) misogynist practices only whisper about major Islamic misogyny—lest it be viewed as politically incorrect criticism of a formerly colonized culture. Like other academics, feminists will not characterize a culture as "barbaric" if it is an Arab or Muslim country—not even if that culture or country is perpetrating genocidal violence against Muslims and what I call gender-cleansing—as is the case in the Sudan. Western feminists and leftists do not feel it is their right to condemn Muslim-on-Muslim violence.

Muslim Women Activists in North America and A History of Women's Seclusion in the Middle East: The Veil in the Looking Glass take such thought disorders to new Orwellian heights. Both books are published by university or academic presses; both have many footnotes, and the latter volume has a long, somewhat outdated bibliography. These academic trappings notwithstanding, neither volume is a scholarly work, but each is a work of propaganda, in the latter case, of a rather fevered imagination. Both volumes illustrate the worrisome trend of prestigious presses publishing non-scholarly works disguised as works of scholarship. (Other examples include the University of California Press publishing Norman Finkelstein, Oxford University Press publishing Tariq Ramadan, and Farrar, Strauss, and Giroux publishing John Mearsheimer and Stephen Walt.)

When Bullock mentions Muhammad, she consistently follows his name with the phrase "peace be upon him" and refers to "Muslim religious theology" as "the Islamic sciences." She views Muslim communities in North America as "under siege" and condemns imaginary, omnipresent "Muslim bashing" and "hate crimes" against Muslims. In her view, "covered" women are not oppressed because "many do positive volunteer activism." Paradoxically, however, Bullock herself notes that many such "covered" and "non-oppressed" Muslim women in this volume themselves write about "negative pressures" from within the Muslim community regarding a "woman's right to speak publicly, [and] be involved in community decision making." Such women have only been able to resist community pressures with the "help of a father or husband."

Bullock's authors also propound some chilling ideas. Nimat Hafez Barazangi, born in Syria and currently living in Ithaca, New York, views herself as a "feminist activist." But I see her as an Islamist exploring ways to use the American legal system to wrest some separate-but-equal gender justice for Muslim women and girls (and only for them, not for other groups of girls and women). I do not oppose such efforts, but they are far short of what Muslim women, even in Ithaca, probably need. Proudly, Barazangi reports how she used Title Nine and the Fourteenth Amendment to persuade Ithaca town officials to allow Muslim girls to swim separately from boys. However, she was unable to persuade Muslim families to allow their daughters and wives to swim at all.

Gul Joya Jafri, a Canadian Muslim and self-described activist, worked with the Afghan Women's Organization. She addressed the way in which the mainstream media portrays Muslim women. Her activism consisted of monitoring media outlets and fighting against "anti-Islam" forces. Joya Jafri's activism does not find it incumbent to protest women's forced wearing of burqas or women's mistreatment by the Taliban. Instead, she laments that the media chooses to portray only these aspects and stories about Afghanistan. It is "true," she says, "but it doesn't need to be reported in that way." As a high school student, Joya Jafri "dreamily quoted the U.N.'s Universal Declaration on Human Rights: ‘Everyone has a right to life, liberty and security of the person,'" but as an adult, she focuses on a fair portrayal of Muslims in the media—presumably a portrayal that does not focus upon or condemn forced veiling, forced marriage, wife beating, female genital mutilation, and honor murders but that, instead, focuses on a Muslim woman's right to practice Islam in a highly visible and separatist way in the West. Like Bullock and Barazangi, hers is a faith-based perspective—one that does not focus on a Muslim woman's right not to cover, become an "apostate," or to live in a way in which the separation of mosque and state is viewed as an advantage.

Chamberlin's work amounts to a romantic hodgepodge moored in American feminism of the 1970s. In effect, she argues that Western women who seek to integrate previously male-only space are far more "conservative" and "patriarchal" than are American lesbian separatists or veiled Muslim women who live in purdah. She sees women-only religious rituals and women-only space as equivalent to anti-patriarchal protest or resistance movements. She views purdah as a "feminist defense against exploitation and as an empowering force." In truth, very wealthy women may have "ruled" other women in the harem or household—but this is equivalent to a wife or mother-in-law ruling her female servants. Some may have influenced their sons or husbands in ways that had far-reaching consequences; however, this paradigm describes only a handful of Muslim women, not the masses at their mercy.

Chamberlin's approach is seductive and dangerous. It caters to a woman's desire to feel morally separate and superior, valued, and safe. Chamberlin claims that slave women in the pre-Islamic and pagan Middle East were forced to work naked and to be sexually available at any moment to all men. Thus, "covered" and secluded women were safer than slave or "uncovered" women—mainly because they only had one male master, not many. The distinction is similar to that between housewives and prostitutes.

The conclusions Chamberlin draws are zany. In her own words: "X million tons of toxic waste created per year or an astronomical national deficit are to the natural and economic resources of our children what the abstraction and exploitation of the individual—women in particular—are to their emotional resources. When faced with exploitation similar to what American women—and more gravely, their children—stand on the brink of today, women in the Middle East millennia ago threw their veil over their faces, put up a wall of mystified honor, and said: ‘So far you may exploit, but by God no further.'"

The Islamization of America has begun. Pro-Islamist, anti-American, anti-Israeli, and anti-Jewish hate speech is protected on American campuses by concepts such as academic freedom and freedom of speech. False and often paranoid allegations of "Islamophobia" are taken seriously by Western intellectual elites who deny (or justify) the reality of the Islamist war against infidels. Doctrines of multicultural relativism and unspoken fears about "death by lawsuit" or physical acts of violence make it difficult for anyone to tell the truth about the Islamist war against Western values.

If Western feminists are not alone in appeasing Islamization, then, the postcolonial and postmodern feminist academy is very much part of the problem.

Phyllis Chesler is the author of fifteen books including Women and Madness (Doubleday, 1972), and, most recently, The Death of Feminism: What's Next in the Struggle for Women's Freedom (Palgrave Macmillan, 2005). She is the co-founder of the Association for Women in Psychology and the National Women's Health Network.
Posted by Dan's Blog at 12:34 PM - No Comments   Add a Comment  
 

 Comments on China Stability and its Stock Market
 

The Chinese focus on stability at home is also a function of their current stock market bubble ARTICLE: “China Puts Growth Atop Agenda: Hu Pins Stability of Nation, Communist Party on Economic Progress,” by Andrew Batson and Jason Leow, Wall Street Journal, 16 October 2007, p. A4. ARTICLE: “Fear and Hope Rise With China’s Stocks: Market Frenzy Nurtures New Investors and Firms; ‘It’s Like a Bubble,’” by James T. Areddy, Wall Street Journal, 16 October 2007, p. A1. ARTICLE: “Can China Fund Meet Tricky Task: State Firm to Juggle Demand for Returns And Political Worry,” by Jason Dean, Wall Street Journal, 1 October 2007, p. A1. Hu’s got plenty to brag about. China’s per-capita GDP has almost doubled during his first term. How many leaders can say that?! China’s is now above $2,000. If it is doubled again by 2020, as Hu proposes, then China really moves out of that range for mass violence that I’ve calculated in the past (virtually all of the mass violence/civil strife cases of the post-Cold War era have occurred in countries with less than $3,000 per cap GDP). Do I want China to get to that point? You bet. Do I understand that current number hides a lot of inequality? Yes, and so does Hu. Hu also knows that the only way China can move ahead at this point is to up his mix of technology and productivity dramatically, especially as China’s labor pool will shift, age-wise, quite dramatically in the coming decades. Already, we see China’s absolute labor pool peaking in 2015--not exactly a long time away. The ride between here and there is likely to be quite bumpy too. China’s stock markets are volatile and Shanghai’s Composite is showing a price/earnings ratio one associates with bubbles of the Asian sort (Taiwan was 100 when it popped, Japan was 71, China is now 69; all of these numbers tower over our own pre-high tech versions, which were 28 in 1929 and only 18 in 1987, but none reach(ed) our Nasdaq-driven tech bubble, where it topped out at 123!). China’s current stock mania does, as the WSJ states, look “increasingly unsustainable.” It has increased six-fold in two years, which means all that money is coming out of mattresses and old jars and going into the markets like crazy, which is a bit crazy, because those markets are built on very limited transparency regarding Chinese companies, and because foreign investors are highly limited, you’re not getting outside judgment to augment your own echo-chamber. Will it pop? Of course it will. Will it “also leave behind much lasting good, because it is helping build a modern, market-driven financial system,” as Areddy argues? Yes. Interesting to see China’s total value of stock basically reach the status of a true Old Core country: roughly equal to its national GDP ($3.7 trillion). Already, China’s markets boast the world’s most transactions and will raise more money via IPOs than any other market this year. Here’s the huge milestone that really matters: For the first time since China’s economic overhauls began almost 30 years ago, money from the investing public--instead of the Communist Party--is fueling expansion of the corporate sector. The boom is helping to create a class of Chinese companies among the most valuable in the world. Mark that in your mental models of global change, because it is possibly one of the most seminal events of my life. But again, a crash will happen and logically soon. That’s never been the question. The only questions that matter is how the CCP handles it, and how the rest of the global community handles it. Naturally, and as I have briefed and written for now for a couple of years, it’s easy to compare China today on stocks and infrastructure booms with America in the 1920s: China today looks like the U.S. of the 1920s to Marc Faber, a well-known money manager based in Thailand. He notes that just as Chinese investors are confident about their economy, the U.S. economy was surging on hopes about technological changes like the radio and about the rise of a consumer class. Of course, the 1929 crash set in motion a host of new rule sets in America, prompting “the creation of basic investor safeguards that strengthened the market and probably limited fallout from later tumbles.” Not “probably,” I would say. So like I say, China will learn from scandals and crashes. The key for us, is how we mentor them in this process, because we’ve been there and done all that before. But you look at all that uncertainty and looming new rule sets that the Party knows full well it’ll have to adopt as the country matures and moves through all these inevitable crises, and it’s little surprise to me that China has no desire whatsoever to stick its neck out on the Burmas and Darfurs and Irans and North Koreas of the world. Why pick up the quagmire when you got this much going on at home? But the truth is--and will increasingly become--that China has no choice. The rise of the China Investment Corp is a good example: $200B of its $1.4T pile of U.S. dollars. With its development trajectory and demographic trajectory, China can’t sit on all that money and get low U.S. T-bill rates. It needs to invest like a Boomer who’s suddenly found investing religion at age 52! Aggressively. And yet to do that, even with seeming blue chips like Blackstone, and then drop 1/6th of your investment in a few months, and THAT’S scary enough to get popular political backlash at home. Imagine what happens when the military intervention goes wrong? Can America change that equation? It won’t be easy nor quick to pull off. Chinese won’t want to feel like our fodder or our suckers. But clearly they want a more proactive stance in global affairs, and increasingly, they’ll want it out of fear and vulnerability, because increasingly Chinese money and people working abroad will be put at risk--both naturally (due to sheer volume) and malevolence (opponents of globalization’s penetration of their traditional cultures will soon target the Chinese as agents of change). I know the arguments for Sino-American alliance seem too far down the road for many thinkers, but they are not. That reality is rushing toward us--as always--faster than we expect.
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